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AIA takes hit in all-out bid against sequestration

The AIA - led by its CEO, Marion Blakey - is not giving up the fight against sequester cuts. | Reuters

“The entire defense industry was the industry most affected by this and had the most to lose — and lost. We’re on unfamiliar political turf,” Aboulafia said. “The budget hawks basically won out over the defense hawks, and the defense hawks didn’t even put up much of a fight.”

Where the AIA went wrong was in its focus on the economic impacts of sequestration, he added.

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“I would argue that moving forward, they’re going to have to start looking more at national defense requirements rather than economic impact,” Aboulafia said. “They were providing somewhat untenable economic numbers at a time when tea party thinking was winning out.”

That approach is a dead end, Aboulafia said, adding that many members of Congress are less concerned with the economic impact of budget cuts than they used to be.

Sequestration was “a learning experience but not a happy one,” he said. “The biggest thing they learned is that the political landscape has shifted.”

Linda Hudson, CEO of BAE Systems, which is an AIA member, told POLITICO in February that the association and the industry hadn’t done a good enough job of making the case against sequestration.

“My personal opinion is it sounded like our argument was self-serving … in the midst of all the other issues we were dealing with,” Hudson said. “No one wanted to particularly go down that path.”

In the days leading up to the March 1 deadline, AIA made a last-ditch attempt to weave a narrative about the real people who would be affected by the budget cuts.

“Those are the more powerful stories,” Hudson said. “That’s something people can relate to more than they could relate to me or one of the other large defense contractors.”

But the strategy didn’t deliver. And as Thompson pointed out, getting all of AIA’s member companies to work together and put out a common refrain was a tall order.

“The biggest contributors to AIA are not accustomed to getting together on any particular issue. They spend every hour of every day competing with each other,” Thompson said. “Some companies, like United Technologies and Lockheed Martin, were aggressively trying to avert sequestration.”

“Other companies behind the scenes were taking a much more detached view of it,” he explained. “And I think, to some degree, they were motivated by trying to get some advantage over their competitors.”

Not every defense contractor stood to lose the same amount from sequestration, making it tough to motivate some companies to declare the cuts devastating to the industry until it was too late.

“When you’re trying to get Boeing and Lockheed and Raytheon and Northrop [Grumman] onto the same position, a little bit of the detail gets lost from the viewpoint of any particular company,” Thompson said. “The problem in making AIA’s case is that it had to stop a war from happening rather than win one.”

“In other words,” he said, “it had to convince people not to do something before they were feeling the pain of the consequences. And that’s just tough.”

But AIA’s Sterling contended there’s still time for the association to work with lawmakers on serious attempts to reverse the sequester. The federal budget is planned in 10-year segments, and sequestration only needs to have a temporary impact, he said.

“It’s not a pass-fail by March 1,” Sterling said. “We certainly wouldn’t have stopped on March 1 and declared victory. Just like we wouldn’t have done that if they stopped sequestration then; we’re not about to stop what we’re doing now even though it went in place.”